Axis Bank has incurred a monetary penalty from the Reserve Bank of India (RBI) for non-compliance with various regulations. The penalty, amounting to ₹90.92 Lakh, is a result of the bank’s failure to adhere to specific directives outlined by the RBI, including those related to ‘Know Your Customer (KYC) Directions, 2016’, ‘Loans and Advances – Statutory and Other Restrictions’, ‘Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks’, and ‘Code of Conduct for Opening and Operating Current Accounts’. The RBI clarified that the punitive action is based on regulatory compliance shortcomings and does not pass judgment on the validity of any transactions or agreements made by the bank with its customers.
The penalty, imposed through an order dated November 02, 2023, is a result of the powers vested in the RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) of the Banking Regulation Act, 1949.
The RBI conducted the Statutory Inspection for Supervisory Evaluation (ISE 2022) of Axis Bank, referring to its financial position as of March 31, 2022. The examination revealed that the bank failed in preserving records related to customer identification and addresses in specific cases. Additionally, the bank was found to have made persistent calls to certain customers, neglected to ensure appropriate behavior of recovery agents with delinquent borrowers, failed to ensure tape recording of the content/text of calls made by recovery agents, and did not obtain declarations from customers at the time of opening current accounts. The RBI emphasized that this penalty is a consequence of these identified shortcomings in the bank’s operations.
